No Fruits, No Shirts, No Service

The real-world consequences of closed borders

Glenn Garvin from the April 1995 issue

(Page 5 of 7)

Card tracked Miami's unemployment statistics for six years after the boatlift, comparing them with those of half a dozen Sunbelt cities with similar economies. What he found was--nothing. Miami's economy swallowed the newcomers without a trace, like a boa constrictor gulping down a pig.

"You couldn't find any effect of the boatlift on employment in any part of the economy," Card says. "Because most of the people who came during Mariel were unskilled workers with little education, even the most optimistic person might have expected some impact at the lower end of the economy. But when I checked on the statistics for unskilled black or non-Hispanics, you couldn't find anything at all." Some workers were undoubtedly displaced, of course, but they apparently were able to find other jobs very quickly.

Although Card admits to some wonder at the speed and totality with which the Mariel refugees were absorbed, he wasn't surprised by the general principle that economies expand to accommodate newcomers.

"When I read letters to the editor, it's plain that most people seem to think that the number of jobs is fixed," he says. "So, in their view, if you add one more worker to the population of a city, it just means that that guy will have to fight with somebody else for an existing job. It's an extremely narrow and very non-economic view of the world....If you look across cities, the number of jobs is proportional to the number of people in the city. The fact that more people have moved to New York than to Atlanta does not mean that a lot of people have been thrown out of work in New York. What it means is that there are 10 times more jobs in New York than there are in Atlanta."

What happens is that every new person who comes to New York--or to the United States--looking for work is also a consumer. He wants a job, but he also has to buy shoes, eat breakfast, and rent an apartment. The more consumer demand for goods and services, the more jobs are created to fill it. As British writer John Toland noted during an influx of foreign Jews in 1714: "We deny not that there will be more tailors and shoemakers; but there will also be more suits and shoes made than before." Were Toland around today, he might point out that Florida's unemployment rate is lower than the national average, even though it has the third-largest immigrant population of all the states.

Who is going to pick the lettuce and tomatoes? has a companion question. It is, Who is going to design the computers?

"The United States would not be remotely dominant in high-technology industries without immigrants," flatly declares writer George Gilder, who chronicles international competition along the information superhighway. "We are now utterly dominant in all key information technology domains. And at every important high-tech company in America, the crucial players, half of them or more, are immigrants.

"I've spent 15 years now going from one of these companies to another. And always, when you get past the sales people and the public-relations people, in the back you meet the guy who actually invented the product. And he's always from India or Vietnam or someplace like that.

"You exclude immigrants from our high-tech industries and what you get is Europe, where they have no important computer or semiconductor company now after 20 years of focusing on information technologies. There's been a steady stream of heavily funded European economic community industrial policies focused on semiconductors and computers, and Europe has ended this period without a single important computer or semiconductor company....In fact, many of the key contributors to the U.S. industry came here from Europe: Eastern Europe, Italy, Belgium, Britain, France. Where would we be if we hadn't welcomed them?"

Does Gilder exaggerate? Consider the history of a single company: Intel, the $10-billion Silicon Valley company that is the world's largest producer of semiconductors. It offers a striking example of the creative forces unleashed by bringing together talented, ambitious people from all over the world (including the United States) and allowing them to share ideas in an open, entrepreneurial economy.

1968: The company is founded by two Americans who are quickly joined by Andrew Grove, a 31-year-old Hungarian engineer who fled his country 12 years earlier as Soviet tanks poured in. Grove, who left Hungary with $20 in his pocket, will eventually rise to be Intel's CEO.

1969: Intel scores its first big success with the MOS chip, which becomes the semiconductor industry's favorite technology. The team that develops the chip is spearheaded by Les Vadasz, a Hungarian who will eventually become an Intel vice president.

1970: Intel introduces the DRAM chip, which will soon be one of the fundamental building blocks of virtually all computers. Les Vadasz plays a key role on the development team.

1971: Dov Frohman, an Intel engineer from Israel, invents the EPROM chip, which retains its memory even when the power is turned off. It quickly becomes indispensable in everything from telecommunications equipment to automobiles.

1974: Intel unveils the 8080, the first general-purpose microprocessor. Of the three top people on the development team, one (Federico Faggin) is Italian and one (Masatoshi Shima) is Japanese.

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